Jeffry Picower may have been the biggest recipient of money stolen by Bernard Madoff, according to this ProPublica story on the HuffingtonPost.
Picower, the secretive businessman, may have withdrawn more than $5.1 billion from the account that he had with Madoff securities, according to a lawsuit filed against Picower by the trustee for Madoff’s victims, Irving Picard.
The money was withdrawn between 1995 and 2008, according to the story, and the withdrawals peaked in 2003, when Picower reportedly withdrew more than $1 billion from the account.
The story seems to suggest that there might be something fishy up with Picower’s massive withdrawals:
Picower belonged to a select group of Madoff investors who received souped-up returns. A Wall Street Journal story published in May cited unnamed sources saying that prosecutors were looking into eight investors who appear to have received special treatment from Madoff. Among the eight named, Picower seems to have withdrawn the most money, with the bulk of it coming from an account called "Decisions, Inc." According to the Madoff trustee’s court filings, "the account reflected little trading activity and relatively few holdings," yet Picower took hundreds of millions out of it. At the time of Madoff’s arrest, the account had a reported negative net cash balance of more than $6 billion.
At the beginning of each quarter, the Picowers received sums that grew from an annual total of $330 million in 1996 to $1 billion in 2003. These withdrawals were divided into odd numbers spread over various accounts. Added together, they usually equaled large even sums. For example, on January 2, 2003, Picower withdrew $1,378,852 from his account Jln Partnership. Yet when withdrawals across all accounts were totaled for that day, they amounted to precisely $250 million.
Picower’s quarterly withdrawals reached their zenith in 2003 and then decreased by half the next year, eventually dropping to their lowest point in 2006. For some reason, the quarterly withdrawals totaled an uneven $16,975,422 in 2006, only to rebound to exactly $40 million in 2007.
Picower’s extraordinary gains do not appear to have been achieved at random. The trustee’s complaint details how Picower, often acting through a subordinate, ordered up "returns" which Madoff’s office then delivered. In some cases, Picower is alleged to have requested backdated returns for trades or sales of securities.
In a 2002 article, Forbes suggested that Picower was worth about $300 million, despite that the same year he had taken out $895 million from his Madoff accounts, according to ProPublica. And when it was reported that the Picower foundation was closed shortly after losing everything in Madoff’s scandal, it was also reported that at the time the foundation had been worth nearly half a billion dollars, and that in 2007 was the country’s 71st largest private foundation.
Here is why we care:
The foundation gave heavily to Jewish causes as The Fundermentalist reported in December. From Picower’s 990 tax filing from 2007:
* American Friends of Herzog Hospital to help children living under fire in Sderot ($100,000)
* Foundation for Jewish Camp ($109,278)
* Gift of Life Bone Marrow Foundatoin ($1,500)
* Jewish Family and Life ($33,333)
* Jewish Outreach Institute ($185,000)
* UJA –Federation of New York ($56,250)
* American Jewish World Service ($75,000)
* Jewish Television Network ($50,000)
* Limmud New York ($225,000)
* Moving Traditions ($75,000)
* Hillel ($50,000)
* Interfaith Family.com ($25,000)
* Jewish Coalition for Service ($40,000)
* Avodah ($75,000)
* Beth Israel Deaconess Medical Center in Brooklin, Mass. for diabetes research $50,000
* Jewish Community Center in Manhattan $10,000
* Palm Beach Fellowship of Christians and Jews $5,000
* South Florida Chapter of the Susan G. Komen Breast Cancer Foundation $5,000
* United States Holocaust Memorial Museum $10,000
* American Friends of the Tel Aviv Museum of Art $5,000
* Beth Israel Deaconess Medical Center Diabetes Research $500,000